No. 24.
Mr. Kasson
to Mr. Evarts.
Vienna, March 4, 1878. (Received March 22.)
Sir: As supplement to my dispatches relating to the tariff legislation of this empire, and to the general movement towards higher customs rates among European nations, I submit the further information following.
In my dispatch No. 41 I advised you that the ministry of Prin e Auersperg had made a cabinet question of maintaining the integrity of their bill, including the very high revenue rate of twenty-four florins on coffee and eight florins on petroleum, and had consequently resigned upon ascertaining that the Reichsrath would not adopt these rates. The Emperor, after calling in as advisers the leaders of the parties opposed to these rates, found the formation of a new ministry impracticable. The old ministry was therefore restored, after an interval of ineffectual and perhaps merely formal efforts for a different solution. The tariff bill was again taken up, the duties in question were reduced by the house from the figures proposed to twenty florins and three florins respectively, and progress was made with the bill without other changes of importance.
The discussions now approach their termination in the Reichsrath of Austria. Debate has been concluded and the government bill adopted in the Reichstag of Hungary, where the rates of twenty-four and eight florins were, however, adopted for coffee and petroleum respectively, as proposed by the government. The bill pointedly aims at the restoration and future protection of various suffering manufactures and industries of Austria, by increasing the rates of duties on articles competing too successfully with national manufactures.
In a former communication I advised you that this was not the tendency of Austria alone. Other continental nations are drifting in the same direction. Many European commercial treaties are expiring. Each government, much more carefully than formerly, is advising with the representatives of its various industries, to avoid any mistakes arising from ignorance of details, and in order to put their interests on such a footing that their home markets cannot be suddenly and ruinously flooded from abroad. Indeed, it seems to me that all Europe is entering upon what may be styled an era of national selfishness, both in its political and commercial relations. Every government in its political relations with others, and especially in connection with the Eastern question, fills the air with the asseveration, not as formerly of maintaining old treaties or the “balance of power,” but of the resolution to” protect its own interests,” Whether in England, Austria, Italy, France, or Germany, there is the same cry. So it is, also, in respect to commercial interests. There is not a cabinet minister on the Continent, whose declarations have fallen under my observation, who does not take this ground when speaking of new commercial treaties, or of readjustments of tariffs.
In case you have not seen that portion of the forthcoming report, introductory to a tariff bill prepared by the French ministry (but not yet submitted to the Assembly), from which I have just now received the following extract, I beg your attention to it, as completely confirming the statements of European commercial policy which I have heretofore expressed. All such legislation in Europe is not only carefully pre-studied and elaborated by responsible officers, and adjusted in all its relations, [Page 33] but it is also motived (motivé) with equal care, that all reasons for it may appear with the bill, and like it be subjected to criticism. It is from this “motive” of the French bill that I take the following extract. After alluding to the former bill introduced in 1877, which proposed legislation in the direction of lower duties, “because we at that time supposed the economic doctrines which had prevailed since 1860, in most of the great states, were still in favor,” they proceed as follows:
“We hoped the commercial treaties to come would show fresh progress in the direction of free trade, would facilitate the extension of our export trade, and in accord with the ‘Conseil Supérieur du Commerce,’ which, as regards this rule, only made an exception to the advantage of the cotton industry, we submitted the duties of the conventional tariff as a limit only to be exceeded in the exceptional case provided for by article 5. But the reaction from the crisis from which the commerce of the world is so cruelly suffering, added to the demand for money by most states, has given a new direction to ideas. Recent significant facts give us reason to fear that our hopes will not be realized, and that most states will be drawn into increasing their tariffs. We had to struggle against this tendency in our recent negotiations with Italy. We shall, perhaps, have to do so again, when we have to treat with Switzerland, which is at this moment occupied with a bill for the increase of her tariff. Other states, large and small, seem to be going in the same direction. In presence of this new situation, just when the commercial treaties are all expiring, it would be imprudent for France to disarm her negotiators by spontaneously according the benefit of the conventional tariff to those who would not reciprocate it, who would make their markets less accessible to her manufactures and natural products, and render, by their demands, the conclusion of a ‘commercial convention impossible.’”
The “motive” then continues with an assertion that the ministry, nevertheless, does not mean to go back to protection, but that their action proceeds from a desire to arm themselves in their intercourse with other nations with the power to put on a higher duty, if such nations shall refuse what France considers a satisfactory commercial treaty. My chief object, however, in transmitting this extract is to confirm by that high authority the statements already made by this legation, of the important change of commercial policy going on in Europe. Its results cannot yet be fully predicted. That a change of opinion and doctrine has already taken place is certain. It appeared to me anomalous, and possibly, in view of our great commerce with Europe, dangerous, that the United States should be in transition from protective legislation toward free trade at the same moment that Europe is in transition from free trade toward protection. With their own national markets secured to national industry against our competition, their surplus might, under such circumstances, be employed to the suppression of some of our industries which may not be equally well guarded.
I ought, perhaps, to add as an indication of popular views in France, that the French “general syndicate of textile industries,” a few days since urged the government to proceed with this legislation, and “to raise the duties on importation, in order to afford suffering industries the relief indispensable to them.”
Since the first part of this dispatch was written, the debate on the tariff bill in the Reichsrath has been finished, and the bill has passed to the third reading. There remain a few points of difference to be adjusted between Austria and Hungary, the former having changed some of the rates in the original bill, which the latter adopted without change.
I have, &c.,